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High Street closes Bouwinvest-backed Fund VI at $500m – Exclusive

The Dutch pension fund was a first-time investor with the Boston-based private equity real estate firm, which raised 25% of the vehicle’s capital from Europe.

High Street Realty Company has held a final close on its latest core-plus real estate fund, High Street Real Estate Fund VI, at its hard-cap of $500 million.

The fund was launched in December 2018 with a target of $450 million and reportedly held a first close on $175 million in 2019. High Street Real Estate Fund VI attracted capital from insurance companies, public and corporate pension funds and other institutional investors from the US and Europe, with a geographical split of 75 percent and 25 percent, respectively. The fund’s leverage was capped at 50 percent, a limit that is understood to have helped attract European investors to the vehicle.

PERE understands more than 50 percent of the fund’s equity is from investors who re-upped, and the overall commitment size from existing investors was 40 percent higher in Fund VI than in the fund’s predecessor, Fund V, which raised $353 million in 2017, according to PERE data.

Limited partners in the fund included Dutch pension fund manager Bouwinvest, which committed $65 million in 2019, the State of Wisconsin Investment Board, which earmarked $75 million the same year, and Maine Public Employees Retirement System, which committed $25 million in 2018. SWIB and Maine PERS had committed to Fund V, Bouwinvest was a first-time investor with High Street.

In a November statement, Gijs Plantinga, director of Northern American investments, commented on its allocation to US last-mile logistics: “Last-mile delivery – the final stage of the delivery of a package or product to the consumer’s home – is one of the most important steps in the supply chain, especially now that the growth of same-day delivery is growing exponentially. Demand for this type of real estate in major US cities is huge.”

With critical supply shortages arising in the wake of the covid-19 outbreak, “the demand for manufacturing facilities, last mile delivery and fulfillment centers will all increase – changing the industrial landscape for decades to come,” commercial real estate services firm JLL said in a report released Wednesday.

However, it is understood that coronavirus did not have an impact on the fundraising since all the fund’s commitments were made prior to the outbreak in December.

With Fund VI, High Street will continue its strategy of acquiring smaller warehouse distribution assets in the US. The properties are typically multi-tenanted by smaller users that need to be closer to urban centers to fulfill last-mile logistics requirements. On behalf of the fund, the firm will target primary distribution markets in the eastern two-thirds of the US, including Chicago, northern New Jersey, central Pennsylvania, Atlanta, Florida and Texas.

To date, the firm has acquired nine assets that in aggregate represent approximately 25 percent of the fund’s total commitments. Using leverage, the firm will aim to acquire approximately $1 billion of assets in its target markets through the fund.

Accord Capital Partners acted as global capital advisor to High Street.